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On-The-Air (28/11/2014)

On-The-Air (28/11/2014)

safm28nov2014

28th November 2014

  

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Every Friday morning, SAfm’s AMLive’s radio anchor Sakina Kamwendo speaks to Martin Creamer, publishing editor of Engineering News and Mining Weekly.  Reported here is this Friday’s At the Coalface transcript:

Kamwendo: A black-controlled company has taken over crucial aluminium infrastructure on South Africa’s east coast.

Creamer: A lot of our aluminium infrastructure has been in play because of the decision by BHP Billiton, the biggest mining company, to demerge some of those assets. They also closed what we know as the Bayside smelter, which is an aluminium smelter. The uncertainty has now been taken out of this, because a black-controlled company Isizinda, led by 47-year old chemical engineer Sizwe Khumalo. His group has actually taken over the Bayside casthouse.

A deal has been struck with BHP Billiton’s Newco side that they will receive 96 000 tons of liquid aluminium a year over five years. It is a R10-billion deal. They will then convert that liquid aluminium into slab and pass it on to Hulamin. We just heard the Hulamin radio advert now coming over the air in this very studio and the drumming of the aluminium sound, that is now 30% State-owned and is highly dependant on primary aluminium besides the recycled aluminium.

The primary aluminium they are talking about are these slabs coming through from Bayside, which is being taken over by Isizinda, which means hub in Zulu. They have got big ambitions. Sizwe Khumalo wants to go into extrusion billet, aluminium wire, rods and slugs. He is already developing a beneficiation activity on the Richards Bay Industrial Development Zone. A very nice outcome of BHP Billiton’s withdrawal actually helping our activities to intensify here and probably grow.

Kamwendo: The mining company that is being cut out of BHP Billiton is on track to be listed next year.

Creamer: BHP Billiton has decided that these assets around here, 4% of its turnover is just too small. BHP has become such a giant, it is almost robotic, its almost just a manufacturer now. These assets, although they are mouth watering to everyone else in the world and you see how a lot of the people want to pick up the South African assets, particularly the manganese and also our energy coal and aluminium.

They are not core any longer to this massive big giant BHP Billiton. They are demerging into what they call Newco. They brought everybody together and I must say that they are doing the hand over in a very orderly way. There will not only be South African assets in this Newco, which is listed on the Johannesburg Stock Exchange, but there will be a lot of international assets, 12 assets in five countries.

There will also be coal in Australia, aluminium in Australia, aluminium in Brazil, nickel in Colombia. Although these assets are regarded as small by BHP Billiton’s high standards, they averaged earnings of about R36-billion a year.

I can see a lot of people going for these shares on the Johannesburg Stock Exchange when it eventually comes up in this orderly fashion. BHP Billiton rolling it out in such a good way they have already appointed a South Africa COO which will run all the South African assets, Mike Fraser, from Johannesburg.

Kamwendo: No free shares floating around?

Creamer: People who own shares in BHP Billiton now are entitled to 100% of the shares in the Newco. So, they can take up that option, if they don't then the shares will become available.

Kamwendo: A world diamond watchdog has put out a warning of overstated diamond certification.

Creamer: This is not something you associate with diamonds. Probably of all the commodities at the moment diamonds are doing the best. This is an urgent action that is being called for by the World Federation of Diamond Bourses, headed by President Ernie Blom, which is a South African, by the way. He is saying that we can not afford to have diamond integrity tested.

We can’t have a few laboratories over stating and have them putting out overstated diamond certification, because this is going to come back to haunt us. He is warning them that if this is being done blatantly this could be fraud.

It is coming out of certain diamond laboratories and there is going to be a massive meeting of diamond laboratories now to make sure that the ethics can be put back into this grading and certification, so that there is no doubt about the integrity and value of what is being sold by diamond sellers, who Blom has warned can’t hide behind these reports and claim ignorance.

Kamwendo: Thanks very much. Martin Creamer is publishing editor of Engineering News and Mining Weekly, he’ll be back with us at the same time next week.

 

Edited by Creamer Media Reporter

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